Posted on 01/23/2025 7:06:20 AM PST by EBH
Consumer stress has intensified, with an escalating share of credit card holders making only minimum payments on their bills, according to a Philadelphia Federal Reserve report.
In fact, the share of active holders just making baseline payments on their cards jumped to a 12-year high, data through the third quarter of 2024 shows.
The level rose to 10.75% for the period, part of a continuing trend that began in 2021 and has accelerated as average interest rates have soared and delinquencies also have accelerated. The increase also marked a series high for a data set that began in 2012.
Along with the trend in minimum payments came a move higher in delinquency rates.
The share of balances more than 30 days past due rose to 3.52%, an increase from 3.21%, for a year-over-year gain of more than 10%. It also is more than double the delinquency level of the pandemic-era low of 1.57% hit in the second quarter of 2021.
The news counters a general narrative of a healthy consumer who has kept on spending despite inflation hitting a more than 40-year high in mid-2022 and holding above the Fed’s 2% target for nearly four years.
(Excerpt) Read more at cnbc.com ...
The media obdurately refuses to acknowledge how much trouble we are in,
Trying to be realistic here. Remember what we will experience is the cure. The broken arm needs to be reset, painful in the short term. Everyone cusses the doctor when he does that.
I was just listening on WTAM this morning in my car the ...
get this...
CAR DEALERSHIPS are starting to default and have entire stocks of cars repossessed from the dealerships.
The dealerships are looking at a deflationary spiral. It is a huge red flag on the economy.
Turmp’s in office, so it’s ok to admit the economy is in the crapper.
High CC limits are partly to blame. By the same token though if you don’t have high limits (and available) it penalizes your credit score. It is a double edge sword that the system wields.
Just ran into it in the last 4 months. Paid cash for a roof replacement, the had a hit/skip car accident with 1k deductible, then the cat had a tooth abscess to the tune of 2k. Stuff can add up too quickly.
I work with and for a lot of well to do folks. You know the people who never complain about money. Well, one just had sticker shock at her vet’s office for her 3 cats annual checkups. She was very,very upset at the skyrocket in prices and contacted me looking recommend a new vet. I told her the prices she paid were fair and every place else is even higher.
Things are starting crack.
I know about ten people in my neighborhood who have charged up the maximum on credit cards and defaulted and/or filed for bankruptcy. Free money is all it is to them and then pay an attorney $2k to get it discharged in court.
“CAR DEALERSHIPS are starting to default and have entire stocks of cars repossessed from the dealerships.”
I heard that.....it’s what they deserve for ripping people off for decades.
$100+k for an SUV?....$60+k for a Jeep Wrangler?.......the whole auto dealership purchasing paradigm needs to change completely.....maybe this is it.
I am in the same position as you. ZERO debt. No mortgage. No car loans. I charge almost everything on my AMX because I get 1-6% cash back on those purchases. Then I pay it off every month.
However, I work in an office of 60 people. I am sure there are people who have tens of thousands of credit card debt. One that surprised me a little bit is one of my office buddies who is married with four kids. He has built a rental real estate portfolio of seven houses in the last dozen years that is now worth multiple millions.
Yet, he confided in me recently that he found out his WIFE had a credit card he did not know about. She had over $30K on it. Flipped him right the F out. She has a really good job too. Making close to six figures as a school administrator. I told him to seek counseling. Apparently, this is not the first time this has happened with her.
“one just had sticker shock at her vet’s office for her 3 cats annual checkups.”
We have 4 pet children so I’m very familiar with it.
Also, I hear insurance for pet medical bills is not worth it.
The Vicari Auto Auction recently sold a beautiful white-on-black ‘69 GS Stage 1 for under $30K. Granted that it was certainly not the best in it’s class, but still...It made me think that $30K might be better spent on a car like that, even if you have to drive it every day.
Pet insurance for my dearly beloved cat covered 80% of the 2K emergency dental surgery he needed. But...with pet insurance you have to have the funds upfront. It is a reimbursement system. For some dogs etc. a torn ACL can run over 8K.
I think(and I am NOT a psychiatrist or stayed at a Holiday Inn Express last night) it is a MENTAL ILLNESS of some sorts in many cases. Similar to people that are hoarders. Buying things make them feel more fulfilled some how.
There is also the keep up appearances. Keeping up with the Jones. They buy things for the kids. Like the kids have to go to this lessons. Have to play this sport. Have to have new clothes. Have to go out to dinner 1-2X a week. Have to have a new car instead of driving an older car.
Scarier still is the number of retired people on pensions who are in credit card debt. Read one report that said the average retiree owes $12k on credit cards.
I surveyed my friends and to a one they all had large balances on their credit cards, one $12k. I was really shocked (but maybe shouldn’t have been).
I paid the last credit card off in 1999 and never looked back.
Yep. My daughter had pet insurance for her elderly large dog who needed CCL surgery - and it was about $8,000 - insurance paid off most of it including physical therapy afterwards.
I didn’t have insurance and spent a little less than that on my beloved small dog that had a whole host of health problems ending in him being euthanized at age 10.
I’ll never be without it again.
The hidden debt by the wife will do them both in.
There is absolutely NO reason to go to the vets office for a checkup.
My wife and I have been breeding dogs for over twenty years.
The only time we visit the vets is one of them needs an xray to know how many pups are in there.
The ONLY shots you need to give an adult dog is rabies.
It was more than twenty years ago that I bought some gas at my local convenience store and saw a fella come in and buy 20 dollars worth of lottery tickets and charge them on his credit card.
And I thought banks allow charges for the decriminalized numbers racket?
I don’t live in an area with a thriving economy, yet I was taken back that a new non national coffee drive thru opened not half a block from a Dunkin Donuts and not two blocks from two different Starbucks.
The place seems to always have five or six cars in line.
Five dollars or more a cup for joe is beyond my comprehension.
As is five dollars for a dozen eggs.
No big deal I guess if the printing presses keep printing money and Steve Martin and Martin Short do these commercials where they pimp the illusion that running up charges on your credit card is somehow beneficial.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.